Colonial Downs plans to appeal racing commission order

Colonial Downs president says commission has no authority to order racetrack to sign eight-week, 24-day 2015 thoroughbred season contract

Colonial Downs is insisting that the Virginia Racing Commission (VRC) overstepped its powers last week when it ordered the racetrack to sign a 2015 thoroughbred season contract with conditions and has filed a notice of appeal in Richmond Circuit Court.
(Tidewater Review / July 1, 2014)

Colonial Downs is insisting that the Virginia Racing Commission overstepped its powers last week when it ordered the racetrack to sign a 2015 thoroughbred season contract with conditions.

The track has filed a notice of appeal to that directive in Richmond Circuit Court.

“They have the right and power to order us to enter into a contract but not with special terms,” said Colonial Downs President Ian Stewart in a phone interview Tuesday. “They exceeded their statutory authority.”

Last week, the VRC ordered Colonial Downs to enter into an eight-week and 24-day 2015 thoroughbred season contract with the Virginia Horsemen's Benevolent and Protective Association by July 1. Doing so would immediately reopen the four Off-Track Betting facilities that were closed in January after the two parties refused to sign a 2014 contract.

As part of the proposed agreement, the VRC would recant its request for a 2014 thoroughbred season, meaning that the season would be canceled.

According to Stewart, Colonial Downs notified the VRC on June 27 that it intends to file an appeal with the Richmond Circuit Court.

The track now has 30 days to file the actual appeal.

“If an appeal is filed, our office will work with our client agency, the Virginia Racing Commission to respond appropriately,” said Michael Kelly, director of communications at the attorney general's office.

“Whether the appeal is filed or not, Attorney General Herring and his team will continue to work with our client and others involved to try to broker a compromise between the two sides that protects and promotes this important industry in the commonwealth.”

New Kent has estimated a $402,000 loss in local revenue from the lack of the 2014 thoroughbred season and has factored it into its fiscal year 2015 budget.

According to County Administrator Rodney Hathaway, most of the money is attributed to the loss of OTB revenue but does factor in meals tax and admission tax.

Residents could see a tax increase in future fiscal years to make up for lost revenue if Colonial Downs continues to operate without thoroughbred racing at the track and OTBs.

Race fans are also feeling the impact.

“I used to love going every weekend up to the OTB facility at Martinsville,” said North Carolina resident and avid race fan Dennis O'Connor. “At least seven people I know have been driving the 4-6 hours to West Virginia to bet instead of the one-hour trip to Martinsville.”

The VHBPA and Colonial Downs have been at odds for six months over the 2014 thoroughbred season schedule. As a result, four of the eight OTB facilities were shut down after arguments over the length of the thoroughbred season led to the contract's expiration in January. The remaining four OTB facilities also cannot take bets on any Virginia thoroughbred racing, since a contract has not been signed between Colonial Downs and the VHBPA.

According to Stewart, although having a 2014 thoroughbred season is “highly unlikely,” he is hopeful about the 2015 season.

Stewart said Colonial Downs is still holding out for a thoroughbred season with fewer race days and higher purses.

“We want a higher purse to draw a higher quality of thoroughbred horses,” he said Tuesday.

However, Petramalo said that having a shorter season would not be financially beneficial for the horsemen, who transport their horses to Colonial Downs and need the purse money to offset costs.

The thoroughbred contract deadlock does not affect harness racing.

Currently, the four open OTBs, including two in Richmond, are accepting bets on harness racing, which will run for 24 days in September and October.

VHBPA Executive Secretary Frank Petramalo said that his organization is unaffected by Colonial Down's intent to appeal the VRC order and is anxiously awaiting the outcome.

However, the VHBPA has lost $1.5 million as a result of the contract dispute. Colonial Downs has lost in excess of $2 million, while the VRC has lost $337,000.

The horsemen's association is a nonprofit organization made up of 1,300 thoroughbred owners and trainers who race at Colonial Downs and award purses, or set amounts of prize money, to the winners.

Although the future of thoroughbred racing in Virginia still remains uncertain, Kelly said the VRC remains “hopeful that a bargain can be struck which will get the action out of the courtroom and back on the track where it belongs.”